Pearson Mustang - HELP!!!
Joined: May 2006
Posts: 24
RE: Pearson Mustang - HELP!!!
ORIGINAL: atomsk680
someone needs to go!!! and then tell us what happens!
someone needs to go!!! and then tell us what happens!
If anything shakes out, I will post an update.I can tell you that he didn't pay the bill for his web hosting, so his website is no longer active. Beware if you see this ad still running in some Auto Trader type publications... [&:]
Joined: May 2006
Posts: 24
RE: Pearson Mustang - HELP!!!
[quote]Creditors, customers grill custom-car builder at his first bankruptcy hearing
Frank Graham (North Platte Bulletin)
Roly Leahy traveled nearly 10,000 miles, from Helensvale Australia, to attend a court hearing in Lincoln County Thursday. Leahy came to North Platte to get the $36,000 he gave to Scott Pearson for a custom-built Mustang back. He attended Pearson’s bankruptcy hearing in U.S. District Court.
Pearson is the owner of Pearson Mustangs at 1002 Prospect. The company has been building 1967 replica “Eleanor†mustangs, made popular by the 2000 movie “Gone in 60 Seconds,†for nearly three years. The cars are built from kits and can run from $65,900 to more than $90,000, according to Pearson.
Customers paid half down and the balance on delivery. The problem, according to at least 21 of Pearson’s customers, is that he took their money but didn’t deliver the cars he promised.
After three lawsuits were filed in Lincoln County District Court and one judgment was issued against him, Pearson declared bankruptcy May 4.
In his bankruptcy filing, Pearson lists 21 customers who gave him more than $1 million to build at least 22 cars. He listed assets of $33,100 and liabilities of $1,242,382.11.
Besides the 16 U.S. customers, Pearson lists five from out of the country - two customers who invested from Australia, one from Spain, one from Canada and one from Switzerland. Some of the customers have been waiting for more than two years after giving Pearson thousands of dollars to begin work on a car for them.
On Thursday, the first meeting of creditors was held in U.S. District Court in the North Platte Federal Building. Four of those customers were on hand to question Pearson and try to recover their money.
Leahy said it cost him more than $5,000 to fly from Australia to North Platte to confront Pearson but he said it was worth it if he could recover his investment.
“This is my third trip here,†Leahy said. “All told, I’ve spent more than $16,500 to come to America and track this man down.â€
Leahy said he became suspicious of Pearson soon after he ordered his Mustang and paid his down payment so he traveled to the U.S. twice to check on the progress of his car. He said he had serious reservations but tried to be optimistic that Pearson would someday deliver the car he ordered.
Like other customers at the hearing, Leahy is now just angry and wants to get his money back.
What went wrong?
Pearson and his father, Gary, built the custom-made Mustangs.
Customers who have seen Pearson’s work believe they are good craftsmen and build beautiful cars. One car won first place at a car show in Colorado.
The shop still has an ad running on Autabuy.com and says, “Hurry, only five more cars to be built this year.â€
Several customers who gave Pearson money said they had seen his ad.
But, according to his latest filing, Pearson owes the magazine $2,800 for the ad. The magazine did not return calls from the Bulletin.
Pearson said they just got overwhelmed. He said the company gained national attention from their web site and orders poured in. He said they had difficulty keeping up with them.
According to the bankruptcy, Pearson lists an inventory of 17 Mustangs with a value of $21,250. The filing says Pearson owes $86,943 in loans, $7,500 in credit card debt, $29,296.61 in insurance, state and federal taxes and $2,600 in car transport costs. He also owes $5,000 in parts, according to the filing.
The filing says Pearson took $73,561 in salary from the shop during 2004 and 2005. He took $4,346 out in salary in 2006.
Pearson pays his dad, Gary, $61,000 annually for his work at the shop, the filing said.
Four months ago, Pearson took a job as a conductor on the Union Pacific Railroad and makes a salary of $3,900 a month. The shop paid $1,100 in rent.
By filing Chapter 7 bankruptcy, Pearson will turn over all non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the creditors. The debtor then receives a discharge of all dischargeable debts usually within four months. In the vast majority of cases the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick “fresh start.â€
Customers said the Pearson became increasingly difficult to contact, did not return calls and made promises that their cars were “coming along.â€
A former employee of the shop, Terry Elliott of Hemmingford, said employees were instructed not to answer the phone.
“They had a rule not to answer the phone,†Elliott said. “People called like crazy but we never answered the phone, just let the answering machine get it.â€
Elliott worked for Pearson Mustang for eight months – from June 2005 through February 2006. He said the shop had orders for at least 16 cars but none were getting completed. In fact, he said they laid him off when they should have been hiring more people to complete the orders they had already taken. He said they should have been turning out a car a month but they weren’t.
Elliott said during the eight months he worked there, Pearson Mustang only completed and shipped two cars. He said during that time they were taking new orders.
Pearson faces the music
The three hour hearing on Thursday gave the customers a glimpse at how Pearson did business.
Pearson and his wife, Kristin, sat with their attorney James Bocott and answered questions under oath posed by the trustee, Phil Kelly. Pearson also answered questions from the customers, attorneys and other creditors.
Besides Leahy, other Pearson customers present were Frank Welch from Florida, Jim Powers from Ohio and Rick Freeze of North Platte.
Also in the room were seven more attorneys who represented customers, banks and other creditors. Two private investigators were also present as was an investigator for the North Platte police who is investigating possible criminal wrongdoing in Pearson’s case.
The Bulletin also learned that federal postal inspectors are also investigating Pearson’s business practices.
Pearson's father, Gary, was also in the courtroom.
Pearson was questioned extensively about how the business worked but he provided few details on individual customers. He said that customers payments went into the business checking account and that they didn’t keep individual invoices on parts purchased for each car.
“If we needed a part, we just bought it,†Pearson said. He testified that the business owned no tools, that his father – whom he called a contract laborer – provided his own tools. “We always had access to dad’s tools,†Pearson said.
Pearson admitted the business had three employees working in the shop at various times within the last three years but he couldn’t remember one of the employees last name.
On a direct question by the trustee, Pearson said they received payments from customers through the U.S. Postal Service.
Pearson testified that he build and delivered 14 cars but was vague on the details.
On questioning by the trustee, Pearson admitted they refunded money to some customers.
“Where did you get that money?†the trustee asked.
“From new customers,†Pearson said. He explained that the money from new orders was used to refund customers money who grew impatient. He said payments to three customers worked that way.
Pearson said it was poor decisions that caused his business to fail. He said they had to pay back customers which left them with no working capital.
“So you were making promises you knew you couldn’t keep?†the trustee asked.
Bocott, Pearson’s attorney, jump into the questioning and advised his client not to answer the question. Bocott advised Pearson to take the Fifth Amendm
Frank Graham (North Platte Bulletin)
Roly Leahy traveled nearly 10,000 miles, from Helensvale Australia, to attend a court hearing in Lincoln County Thursday. Leahy came to North Platte to get the $36,000 he gave to Scott Pearson for a custom-built Mustang back. He attended Pearson’s bankruptcy hearing in U.S. District Court.
Pearson is the owner of Pearson Mustangs at 1002 Prospect. The company has been building 1967 replica “Eleanor†mustangs, made popular by the 2000 movie “Gone in 60 Seconds,†for nearly three years. The cars are built from kits and can run from $65,900 to more than $90,000, according to Pearson.
Customers paid half down and the balance on delivery. The problem, according to at least 21 of Pearson’s customers, is that he took their money but didn’t deliver the cars he promised.
After three lawsuits were filed in Lincoln County District Court and one judgment was issued against him, Pearson declared bankruptcy May 4.
In his bankruptcy filing, Pearson lists 21 customers who gave him more than $1 million to build at least 22 cars. He listed assets of $33,100 and liabilities of $1,242,382.11.
Besides the 16 U.S. customers, Pearson lists five from out of the country - two customers who invested from Australia, one from Spain, one from Canada and one from Switzerland. Some of the customers have been waiting for more than two years after giving Pearson thousands of dollars to begin work on a car for them.
On Thursday, the first meeting of creditors was held in U.S. District Court in the North Platte Federal Building. Four of those customers were on hand to question Pearson and try to recover their money.
Leahy said it cost him more than $5,000 to fly from Australia to North Platte to confront Pearson but he said it was worth it if he could recover his investment.
“This is my third trip here,†Leahy said. “All told, I’ve spent more than $16,500 to come to America and track this man down.â€
Leahy said he became suspicious of Pearson soon after he ordered his Mustang and paid his down payment so he traveled to the U.S. twice to check on the progress of his car. He said he had serious reservations but tried to be optimistic that Pearson would someday deliver the car he ordered.
Like other customers at the hearing, Leahy is now just angry and wants to get his money back.
What went wrong?
Pearson and his father, Gary, built the custom-made Mustangs.
Customers who have seen Pearson’s work believe they are good craftsmen and build beautiful cars. One car won first place at a car show in Colorado.
The shop still has an ad running on Autabuy.com and says, “Hurry, only five more cars to be built this year.â€
Several customers who gave Pearson money said they had seen his ad.
But, according to his latest filing, Pearson owes the magazine $2,800 for the ad. The magazine did not return calls from the Bulletin.
Pearson said they just got overwhelmed. He said the company gained national attention from their web site and orders poured in. He said they had difficulty keeping up with them.
According to the bankruptcy, Pearson lists an inventory of 17 Mustangs with a value of $21,250. The filing says Pearson owes $86,943 in loans, $7,500 in credit card debt, $29,296.61 in insurance, state and federal taxes and $2,600 in car transport costs. He also owes $5,000 in parts, according to the filing.
The filing says Pearson took $73,561 in salary from the shop during 2004 and 2005. He took $4,346 out in salary in 2006.
Pearson pays his dad, Gary, $61,000 annually for his work at the shop, the filing said.
Four months ago, Pearson took a job as a conductor on the Union Pacific Railroad and makes a salary of $3,900 a month. The shop paid $1,100 in rent.
By filing Chapter 7 bankruptcy, Pearson will turn over all non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the creditors. The debtor then receives a discharge of all dischargeable debts usually within four months. In the vast majority of cases the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick “fresh start.â€
Customers said the Pearson became increasingly difficult to contact, did not return calls and made promises that their cars were “coming along.â€
A former employee of the shop, Terry Elliott of Hemmingford, said employees were instructed not to answer the phone.
“They had a rule not to answer the phone,†Elliott said. “People called like crazy but we never answered the phone, just let the answering machine get it.â€
Elliott worked for Pearson Mustang for eight months – from June 2005 through February 2006. He said the shop had orders for at least 16 cars but none were getting completed. In fact, he said they laid him off when they should have been hiring more people to complete the orders they had already taken. He said they should have been turning out a car a month but they weren’t.
Elliott said during the eight months he worked there, Pearson Mustang only completed and shipped two cars. He said during that time they were taking new orders.
Pearson faces the music
The three hour hearing on Thursday gave the customers a glimpse at how Pearson did business.
Pearson and his wife, Kristin, sat with their attorney James Bocott and answered questions under oath posed by the trustee, Phil Kelly. Pearson also answered questions from the customers, attorneys and other creditors.
Besides Leahy, other Pearson customers present were Frank Welch from Florida, Jim Powers from Ohio and Rick Freeze of North Platte.
Also in the room were seven more attorneys who represented customers, banks and other creditors. Two private investigators were also present as was an investigator for the North Platte police who is investigating possible criminal wrongdoing in Pearson’s case.
The Bulletin also learned that federal postal inspectors are also investigating Pearson’s business practices.
Pearson's father, Gary, was also in the courtroom.
Pearson was questioned extensively about how the business worked but he provided few details on individual customers. He said that customers payments went into the business checking account and that they didn’t keep individual invoices on parts purchased for each car.
“If we needed a part, we just bought it,†Pearson said. He testified that the business owned no tools, that his father – whom he called a contract laborer – provided his own tools. “We always had access to dad’s tools,†Pearson said.
Pearson admitted the business had three employees working in the shop at various times within the last three years but he couldn’t remember one of the employees last name.
On a direct question by the trustee, Pearson said they received payments from customers through the U.S. Postal Service.
Pearson testified that he build and delivered 14 cars but was vague on the details.
On questioning by the trustee, Pearson admitted they refunded money to some customers.
“Where did you get that money?†the trustee asked.
“From new customers,†Pearson said. He explained that the money from new orders was used to refund customers money who grew impatient. He said payments to three customers worked that way.
Pearson said it was poor decisions that caused his business to fail. He said they had to pay back customers which left them with no working capital.
“So you were making promises you knew you couldn’t keep?†the trustee asked.
Bocott, Pearson’s attorney, jump into the questioning and advised his client not to answer the question. Bocott advised Pearson to take the Fifth Amendm
Joined: May 2006
Posts: 24
RE: Pearson Mustang - HELP!!!
So far there have been six hours of creditor meetings, financial records submitted by Scott and hours of research by private investigators and attorneys. After all this, nobody knows what Scott did with all the money! [:@]
Here's the latest...
[quote]Missing cash from Pearson Mustang's business raise interest of attorneys and law enforcement
Frank Graham (North Platte Bulletin)
Creditors and customers of Pearson Mustangs learned Thursday that the owner of the business took more $575,124 cash out the business’ checking accounts but could not account for how it was spent. Under questioning by the trustee Phil Kelly in U.S. District Court Scott Pearson said he could account for the money by providing the check registers.
“Did you bring them to the hearing?†Kelly asked.
“No,†Pearson said.
Kelly gave Pearson until Monday morning to turn the check registers over to his attorney, James Bocott, who will then provide copies for the four attorneys representing some of Pearson’s 21 customers who gave him more than $1.12 million to build custom build Mustangs but got nothing in return.
Pearson was in the custom car business in North Platte since the latter part of 2003. He and his dad, Gary Pearson, ran a shop that built kit cars at 1002 Prospect. The company built 1967 replica “Eleanor†mustangs, made popular by the 2000 movie “Gone in 60 Seconds,†for nearly three years. The cars were built from kits and ran from $65,900 to more than $90,000 in cost, according to Pearson.
Customers paid half down and the balance on delivery.
The problem, according to at least 21 of Pearson’s customers, is that he took their money but didn’t deliver the cars he promised.
After three lawsuits were filed in Lincoln County District Court and one judgment was issued against him, Pearson declared bankruptcy May 4.
In his bankruptcy filing, Pearson lists 21 customers who gave him more than $1 million to build at least 22 cars. He listed assets of $33,100 and liabilities of $1,242,382.11.
Besides the 16 U.S. customers, Pearson lists five from out of the country - two customers who invested from Australia, one from Spain, one from Canada and one from Switzerland. Some of the customers have been waiting for more than two years after giving Pearson thousands of dollars to begin work on a car for them.
On Aug. 17, the second of what could be many hearings with creditors was held in District Court. The issue is whether Pearson can qualify for a bankruptcy.
Pearson admitted releasing three cars to customers after Kelly had taken control of the shop and ordered, “nothing should go in or out of the shop.â€
“You released those cars after being ordered not to?†Kelly asked. “But they were in the shop on the day you filed?â€
Pearson said he had. He said he did not list them on the bankruptcy filing so thought it was all right to return them to the customers.
“So your statements listed in the bankruptcy weren’t accurate?†Kelly asked. Kelly said any item in Pearson’s possession was an asset and giving the cars, finished or not, back to customers was a violation of the trustee’s orders.
Pearson shrugged and said he didn’t think they were assets.
Assets in Pearson’s possession after the bankruptcy was filed became the property of the trustee. He could legally have those cars Pearson delivered returned to North Platte, according to legal sources.
Kelly has banned Pearson from his shop, Kelly said. He is not legally allowed on the premises.
But the real fireworks came after attorneys Larry Baumann and Jim Nisley began questioning Pearson about the bank accounts and his business practices.
Pearson admitted to having four bank accounts – the main business account at First National Bank of North Platte, a business account at Centris Federal Credit Union, a personal account at First National and a personal account opened in 2006 at Nebraskaland National Bank.
According to a summary provided by private investigators John McNeel and Paul Wolf, Pearson withdrew $575,004 from the main business bank account at First National Bank between 2004 and 2006 and could not account for where the money went.
The withdrawals from the account were paid in two ways. The bank statements show Pearson withdrew $74,440 from the account by writing checks to cash. The statements show that $500,604 was removed from the account by cash withdrawals.
According to the summary, Pearson removed $118,250 in cash from the account in 2004; $418,994 in 2005 and $40,575 in 2006.
Nisley asked Pearson what the cash withdrawals were for.
“I’ll have to go back and check on that,†Pearson said repeatedly throughout the hearing, offering little to no explanation. He said the money went to buy cars but he couldn’t account for any purchases in detail. He said he had no receipts or a cash ledger but believed he could “recreate†how the money was spent if he went through the check registers.
Nisley took Pearson though numerous cash withdrawals but Pearson said he didn’t remember what each was for.
“Do you have any other source documents to use to account for this money other than the check registers?†Nisley asked.
Pearson said he didn’t.
Kelly asked Pearson if he had any cash.
“No,†Pearson replied.
“None in your pocket?†Kelly asked.
“Yes, about $4,†Pearson said.
Kelly pointed out to Pearson that his first answer, that he didn’t have any cash, had been incorrect.
“Do you have any cash in your house?†Kelly asked. “Buried in a box? Anywhere else in the world?â€
Pearson answered no to each question.
Kelly asked Pearson how he paid his rent and utilities?
Pearson said from the business account.
"The bottom line is, you brought in more than $1.2 million and refunded $500,000. There should be something left over. Where is it?" Kelly asked.
Pearson said he could account for it by looking at the check registers.
Bank records show that Pearson Mustang’s total gross income from 2004 to 2006 was $1.693 million. Tax records show that he refunded $393,000 total during that time.
Pearson admitted that he paid himself by cash withdrawals out of the business accounts into his personal accounts.
The summary shows Pearson paid himself $7,700 in payroll in 2004, $2,370 in 2005 and none in 2006.
Pearson listed five other employees who had worked for Pearson Mustang. He said they were paid from $6 to $17.50 per hour depending on experience but that he had paid his father $61,000 a year.
Under questioning by Baumann, Pearson revealed he had sold cars on eBay.
“How many did you sell?†Baumann asked.
“ About 5 to 10. I’d have to go back and check on that,†Pearson said. “It would be in my eBay history.â€
Kelly asked Pearson to provide his login name and password to the eBay account. He said he would get it himself.
As Pearson began to answer, Bocott interrupted. “Whoa,†he shouted.
“What, you don’t want his account information published in the newspaper?†Kelly asked.
Kelly asked Pearson to write it down and pass it to him.
In the exchange, Bocott said Pearson might want to continue to do business as Pearson Mustang after the bankruptcy was completed.
“From what I’ve read on the Internet, Pearson Mustang would not be a good name to use as a business,†Kelly said, referring to the news stories and Talk Back responses from readers that have been published in the North Platte Bulletin.
Attorney David Schreiber represented Kevin Yama****a, a California man who gave Pearson $34,000 to build a car. Y
Here's the latest...
[quote]Missing cash from Pearson Mustang's business raise interest of attorneys and law enforcement
Frank Graham (North Platte Bulletin)
Creditors and customers of Pearson Mustangs learned Thursday that the owner of the business took more $575,124 cash out the business’ checking accounts but could not account for how it was spent. Under questioning by the trustee Phil Kelly in U.S. District Court Scott Pearson said he could account for the money by providing the check registers.
“Did you bring them to the hearing?†Kelly asked.
“No,†Pearson said.
Kelly gave Pearson until Monday morning to turn the check registers over to his attorney, James Bocott, who will then provide copies for the four attorneys representing some of Pearson’s 21 customers who gave him more than $1.12 million to build custom build Mustangs but got nothing in return.
Pearson was in the custom car business in North Platte since the latter part of 2003. He and his dad, Gary Pearson, ran a shop that built kit cars at 1002 Prospect. The company built 1967 replica “Eleanor†mustangs, made popular by the 2000 movie “Gone in 60 Seconds,†for nearly three years. The cars were built from kits and ran from $65,900 to more than $90,000 in cost, according to Pearson.
Customers paid half down and the balance on delivery.
The problem, according to at least 21 of Pearson’s customers, is that he took their money but didn’t deliver the cars he promised.
After three lawsuits were filed in Lincoln County District Court and one judgment was issued against him, Pearson declared bankruptcy May 4.
In his bankruptcy filing, Pearson lists 21 customers who gave him more than $1 million to build at least 22 cars. He listed assets of $33,100 and liabilities of $1,242,382.11.
Besides the 16 U.S. customers, Pearson lists five from out of the country - two customers who invested from Australia, one from Spain, one from Canada and one from Switzerland. Some of the customers have been waiting for more than two years after giving Pearson thousands of dollars to begin work on a car for them.
On Aug. 17, the second of what could be many hearings with creditors was held in District Court. The issue is whether Pearson can qualify for a bankruptcy.
Pearson admitted releasing three cars to customers after Kelly had taken control of the shop and ordered, “nothing should go in or out of the shop.â€
“You released those cars after being ordered not to?†Kelly asked. “But they were in the shop on the day you filed?â€
Pearson said he had. He said he did not list them on the bankruptcy filing so thought it was all right to return them to the customers.
“So your statements listed in the bankruptcy weren’t accurate?†Kelly asked. Kelly said any item in Pearson’s possession was an asset and giving the cars, finished or not, back to customers was a violation of the trustee’s orders.
Pearson shrugged and said he didn’t think they were assets.
Assets in Pearson’s possession after the bankruptcy was filed became the property of the trustee. He could legally have those cars Pearson delivered returned to North Platte, according to legal sources.
Kelly has banned Pearson from his shop, Kelly said. He is not legally allowed on the premises.
But the real fireworks came after attorneys Larry Baumann and Jim Nisley began questioning Pearson about the bank accounts and his business practices.
Pearson admitted to having four bank accounts – the main business account at First National Bank of North Platte, a business account at Centris Federal Credit Union, a personal account at First National and a personal account opened in 2006 at Nebraskaland National Bank.
According to a summary provided by private investigators John McNeel and Paul Wolf, Pearson withdrew $575,004 from the main business bank account at First National Bank between 2004 and 2006 and could not account for where the money went.
The withdrawals from the account were paid in two ways. The bank statements show Pearson withdrew $74,440 from the account by writing checks to cash. The statements show that $500,604 was removed from the account by cash withdrawals.
According to the summary, Pearson removed $118,250 in cash from the account in 2004; $418,994 in 2005 and $40,575 in 2006.
Nisley asked Pearson what the cash withdrawals were for.
“I’ll have to go back and check on that,†Pearson said repeatedly throughout the hearing, offering little to no explanation. He said the money went to buy cars but he couldn’t account for any purchases in detail. He said he had no receipts or a cash ledger but believed he could “recreate†how the money was spent if he went through the check registers.
Nisley took Pearson though numerous cash withdrawals but Pearson said he didn’t remember what each was for.
“Do you have any other source documents to use to account for this money other than the check registers?†Nisley asked.
Pearson said he didn’t.
Kelly asked Pearson if he had any cash.
“No,†Pearson replied.
“None in your pocket?†Kelly asked.
“Yes, about $4,†Pearson said.
Kelly pointed out to Pearson that his first answer, that he didn’t have any cash, had been incorrect.
“Do you have any cash in your house?†Kelly asked. “Buried in a box? Anywhere else in the world?â€
Pearson answered no to each question.
Kelly asked Pearson how he paid his rent and utilities?
Pearson said from the business account.
"The bottom line is, you brought in more than $1.2 million and refunded $500,000. There should be something left over. Where is it?" Kelly asked.
Pearson said he could account for it by looking at the check registers.
Bank records show that Pearson Mustang’s total gross income from 2004 to 2006 was $1.693 million. Tax records show that he refunded $393,000 total during that time.
Pearson admitted that he paid himself by cash withdrawals out of the business accounts into his personal accounts.
The summary shows Pearson paid himself $7,700 in payroll in 2004, $2,370 in 2005 and none in 2006.
Pearson listed five other employees who had worked for Pearson Mustang. He said they were paid from $6 to $17.50 per hour depending on experience but that he had paid his father $61,000 a year.
Under questioning by Baumann, Pearson revealed he had sold cars on eBay.
“How many did you sell?†Baumann asked.
“ About 5 to 10. I’d have to go back and check on that,†Pearson said. “It would be in my eBay history.â€
Kelly asked Pearson to provide his login name and password to the eBay account. He said he would get it himself.
As Pearson began to answer, Bocott interrupted. “Whoa,†he shouted.
“What, you don’t want his account information published in the newspaper?†Kelly asked.
Kelly asked Pearson to write it down and pass it to him.
In the exchange, Bocott said Pearson might want to continue to do business as Pearson Mustang after the bankruptcy was completed.
“From what I’ve read on the Internet, Pearson Mustang would not be a good name to use as a business,†Kelly said, referring to the news stories and Talk Back responses from readers that have been published in the North Platte Bulletin.
Attorney David Schreiber represented Kevin Yama****a, a California man who gave Pearson $34,000 to build a car. Y
Joined: May 2006
Posts: 24
RE: Pearson Mustang - HELP!!!
If you haven't read any of this thread, at least read this. Scott Pearson is actually hoping to re-open this business once all the smoke clears (if he doesn't end up in jail before then).
If you ever hear anyone thinking about getting mixed up with SCOTT PEARSON or PEARSON MUSTANG in North Platte, Nebraska... do them a favor and tell them to run away as fast as they can!!!
If you ever hear anyone thinking about getting mixed up with SCOTT PEARSON or PEARSON MUSTANG in North Platte, Nebraska... do them a favor and tell them to run away as fast as they can!!!
Joined: May 2006
Posts: 24
RE: Pearson Mustang - HELP!!!
Here's the latest update. With any luck, the bankruptcy request will be denied and people will be able to get something from this guy... [&:]
Pearson's customers claim fraud
Frank Graham (North Platte Bulletin)
Four former customers of Pearson Mustangs of North Platte filed objections to his bankruptcy request Monday claiming the owner, Scott Pearson, committed fraud.
Frank Welch of Florida, Rick Baker of Georgia, Kevin Yama****a of California and Rick Freeze of North Platte each filed their objections in U.S. District Court Sept. 18, the final day allowed for the action.
Combined, the men lost more than $405,425 in transactions with Scott Pearson, according to court records.
Pearson was in the custom car business in North Platte since the latter part of 2003. He and his dad, Gary Pearson, ran a shop that built kit cars at 1002 Prospect. The company built 1967 replica “Eleanor†mustangs, made popular by the 2000 movie “Gone in 60 Seconds,†for nearly three years. The cars were built from kits and ran from $65,900 to more than $90,000 in cost, according to Pearson.
Customers paid half down and the balance on delivery. The problem, according to at least 21 of Pearson’s customers, is that he took their money but didn’t deliver the cars he promised. The 21 customers combined gave Pearson more than $1.12 million to build their custom cars but received nothing in return.
After three lawsuits were filed in Lincoln County District Court and one judgment was issued against him, Pearson declared bankruptcy May 4. He listed assets of $33,100 and liabilities of $1,242,382.11.
Besides the 16 U.S. customers, Pearson lists five from out of the country - two customers who invested from Australia, one from Spain, one from Canada and one from Switzerland. Some of the customers have been waiting for more than two years after giving Pearson thousands of dollars to begin work on a car for them.
Trustee Phil Kelly, in U.S. District Court, has scolded Pearson for moving cars off the property after being ordered not to and for not providing financial records to the bankruptcy court.
At the last hearing, the court and Pearson’s former customers and creditors learned that he took more than $575,124 cash out of the business’ checking account but could not account for how it was spent. He said he would provide check registers for the cash removed from banks and ATM machines.
Pearson also admitted releasing three cars to customers after the court had taken control of the shop and ordered, “nothing should go in or out of the shop.â€
“You released those cars after being ordered not to?†Kelly asked. “But they were in the shop on the day you filed?â€
Pearson said he had. He said he did not list them on the bankruptcy filing so thought it was all right to return them to the customers.
“So your statements listed in the bankruptcy weren’t accurate?†Kelly asked. Kelly said any item in Pearson’s possession was an asset and giving the cars, finished or not, back to customers was a violation of the trustee’s orders.
Pearson shrugged and said he didn’t think they were assets.
Assets in Pearson’s possession after the bankruptcy was filed became the property of the trustee. He could legally have those cars Pearson delivered returned to North Platte, according to legal sources.
Kelly has banned Pearson from his shop, Kelly said. He is not legally allowed on the premises.
To four of Pearson’s customers, they’d seen enough.
The complaints filed this week charge Pearson with defrauding the court and creditors by destroying records, concealing property and fraudulently obtaining money under false premises.
The complaints say Pearson has failed to explain where the money went and that he should not be granted relief from his obligations through a bankruptcy.
Yama****a’s complaint said Pearson repeatedly lied when promising delivery of the cars because he knew the time frame he promised was impossible.
Pearson is under investigation by the North Platte police department and the U.S. Postal Service but no criminal charges have yet been filed.
Frank Graham (North Platte Bulletin)
Four former customers of Pearson Mustangs of North Platte filed objections to his bankruptcy request Monday claiming the owner, Scott Pearson, committed fraud.
Frank Welch of Florida, Rick Baker of Georgia, Kevin Yama****a of California and Rick Freeze of North Platte each filed their objections in U.S. District Court Sept. 18, the final day allowed for the action.
Combined, the men lost more than $405,425 in transactions with Scott Pearson, according to court records.
Pearson was in the custom car business in North Platte since the latter part of 2003. He and his dad, Gary Pearson, ran a shop that built kit cars at 1002 Prospect. The company built 1967 replica “Eleanor†mustangs, made popular by the 2000 movie “Gone in 60 Seconds,†for nearly three years. The cars were built from kits and ran from $65,900 to more than $90,000 in cost, according to Pearson.
Customers paid half down and the balance on delivery. The problem, according to at least 21 of Pearson’s customers, is that he took their money but didn’t deliver the cars he promised. The 21 customers combined gave Pearson more than $1.12 million to build their custom cars but received nothing in return.
After three lawsuits were filed in Lincoln County District Court and one judgment was issued against him, Pearson declared bankruptcy May 4. He listed assets of $33,100 and liabilities of $1,242,382.11.
Besides the 16 U.S. customers, Pearson lists five from out of the country - two customers who invested from Australia, one from Spain, one from Canada and one from Switzerland. Some of the customers have been waiting for more than two years after giving Pearson thousands of dollars to begin work on a car for them.
Trustee Phil Kelly, in U.S. District Court, has scolded Pearson for moving cars off the property after being ordered not to and for not providing financial records to the bankruptcy court.
At the last hearing, the court and Pearson’s former customers and creditors learned that he took more than $575,124 cash out of the business’ checking account but could not account for how it was spent. He said he would provide check registers for the cash removed from banks and ATM machines.
Pearson also admitted releasing three cars to customers after the court had taken control of the shop and ordered, “nothing should go in or out of the shop.â€
“You released those cars after being ordered not to?†Kelly asked. “But they were in the shop on the day you filed?â€
Pearson said he had. He said he did not list them on the bankruptcy filing so thought it was all right to return them to the customers.
“So your statements listed in the bankruptcy weren’t accurate?†Kelly asked. Kelly said any item in Pearson’s possession was an asset and giving the cars, finished or not, back to customers was a violation of the trustee’s orders.
Pearson shrugged and said he didn’t think they were assets.
Assets in Pearson’s possession after the bankruptcy was filed became the property of the trustee. He could legally have those cars Pearson delivered returned to North Platte, according to legal sources.
Kelly has banned Pearson from his shop, Kelly said. He is not legally allowed on the premises.
To four of Pearson’s customers, they’d seen enough.
The complaints filed this week charge Pearson with defrauding the court and creditors by destroying records, concealing property and fraudulently obtaining money under false premises.
The complaints say Pearson has failed to explain where the money went and that he should not be granted relief from his obligations through a bankruptcy.
Yama****a’s complaint said Pearson repeatedly lied when promising delivery of the cars because he knew the time frame he promised was impossible.
Pearson is under investigation by the North Platte police department and the U.S. Postal Service but no criminal charges have yet been filed.
1st Gear Member
Joined: Oct 2006
Posts: 61
RE: Pearson Mustang - HELP!!!
Hi There. There is an add in Sunday's Denver Post (10/22) regarding a bankruptcy auction at Pearson Mustang on 11/4. Thought you might like to know, as it looks like you've spent some time on this.
5th Gear Member
Joined: Jun 2006
Posts: 4,089
From:
RE: Pearson Mustang - HELP!!!
Yeah...was thinking about going to see if I could pick something up for a reasonable price, but I'm thinking it may be too well known to get any good deals.[>:]
ORIGINAL: bronco1
Hi There. There is an add in Sunday's Denver Post (10/22) regarding a bankruptcy auction at Pearson Mustang on 11/4. Thought you might like to know, as it looks like you've spent some time on this.
Hi There. There is an add in Sunday's Denver Post (10/22) regarding a bankruptcy auction at Pearson Mustang on 11/4. Thought you might like to know, as it looks like you've spent some time on this.
5th Gear Member
Joined: Sep 2006
Posts: 2,266
From: Australia
RE: Pearson Mustang - HELP!!!
ORIGINAL: grruminator78
just do what ol RD mercer would do, take it out of his ***.... how big a boy are you?
just do what ol RD mercer would do, take it out of his ***.... how big a boy are you?
that money is still in play somewhere...i'd look for a way to squeeze it out of him.
then again, you guys probably have laws against scaring people. if its anything like our legal system, the perp becomes the victim and the real victim gets screwed using sand for lubricant.
what goes around comes around. karma will take care of him in the end
Joined: May 2006
Posts: 24
RE: Pearson Mustang - HELP!!!
bronco1, thanks for the update! I'd like to see the text of that ad if you still have it.
The bankruptcy hasn't even been granted yet, and the bankruptcy trustee wants to move forward and auction all the guy's assets anyway?!? [&:] At least a couple of people filed to stop the sale from moving forward...so they had to have some sort of emergency hearing to decide if the auction will take place. That was yesterday and I don't know the outcome yet.
As for the cars being sold, here's what I can tell you...
There are 10 or so '67-'68 Mustangs (fastbacks and verts) inside the shop that are in the VERY early stages of work. These cars have been media blasted and primed...but none have had any significant amount of bodywork done. So you've got cars in there that need replacement quarters, floorpans, etc. None of the cars have any interior pieces, and none have drivetrains. Some don't even have front fenders/hoods. He stripped the cars of all parts, and nobody knows what happened to that stuff. The guy wasn't a complete moron. Anything of serious value was removed from the shop before he declared bankruptcy.
Unless you are looking for an absolute bare shell of a project car, there's nut much to look for out there.
The bankruptcy hasn't even been granted yet, and the bankruptcy trustee wants to move forward and auction all the guy's assets anyway?!? [&:] At least a couple of people filed to stop the sale from moving forward...so they had to have some sort of emergency hearing to decide if the auction will take place. That was yesterday and I don't know the outcome yet.
As for the cars being sold, here's what I can tell you...
There are 10 or so '67-'68 Mustangs (fastbacks and verts) inside the shop that are in the VERY early stages of work. These cars have been media blasted and primed...but none have had any significant amount of bodywork done. So you've got cars in there that need replacement quarters, floorpans, etc. None of the cars have any interior pieces, and none have drivetrains. Some don't even have front fenders/hoods. He stripped the cars of all parts, and nobody knows what happened to that stuff. The guy wasn't a complete moron. Anything of serious value was removed from the shop before he declared bankruptcy.
Unless you are looking for an absolute bare shell of a project car, there's nut much to look for out there.